The coal ministry is expected to auction or allot additional 18 coal blocks to the already declared 74 captive blocks, comprising of 42 blocks currently under production and 32 blocks that are in advanced stage of getting operational. The total number of blocks in the first phase now amounts to 92, with 57 mines earmarked for power sector. The government is sounding optimistic that the coal block auction will be a success and will meet the objective of supporting the prevailing coal supply situation. The government expects the 74 blocks to contribute in the tune of 210 million tonnes of coal per annum and an additional 120 million tonnes from the 18 blocks. If anything, the coal block bidding is being projected as a remarkable step given the fact that the incumbent government has set a target to double India’s coal output to more than 1 billion tonnes per annum by 2019.

If the entire process goes as per the schedule, the auction may well be concluded by March 2015. The ministry has announced the following timelines for the entire bidding process: 
1) Dec 22nd 2014 as issuing of RFP, 
2) Feb 3rd 2015 as submission of Technical and Commercial bids, 
3) Mar 3rd 2015 as opening of Technical bid, 
4) Mar 6th 2015 as opening of Financial bid, and 
5) Mar 16th 2015 as allocation of blocks to the winners.

The coal block bidding is going to draw a lot of attention even at the most microscopic level. The incumbent government will have to device a mechanism that is not only transparent but also something that keeps all the bidders on an equal footing. If anything, the government needs to ensure that the opportunity is not lost in public litigation, redtapism and spurious bidding. The government also needs to de-bottleneck the bureaucratic processes, as timely award of blocks and progress of mining activity is the need of the hour.

InfraInsights through its report, “Critical Analysis on the Regulations, Bidding Parameters and Evaluation of Captive Coal Blocks under the new set of Bidding” aims to provide a critical analysis of the regulatory environment, bidding considerations, quantitative & qualitative assessment of the blocks on offer and finally a high-level outlook on the situation of supply-chain in order to assist the bidders, investors, developers, contractors and other key stakeholders in selecting potential blocks for bidding and also providing valuable insights to assist in strategy making

  1. Executive Summary
  2. Background
  3. Evolution of Captive Coal Block Mining in India:
    1. Reason for allowing commercial mining for Captive Coal Blocks
    2. Captive Coal Block mining potential as per the blocks awarded earlier
    3. Projected vs Actual growth in Captive Coal mining and production
    4. Issues & Challenges involved in earlier Captive Coal Mining
    5. Recent changes in the Captive Coal Mining Sector, including outlook of the incumbent government towards domestic coal scenario & captive coal
  4. Existing and Evolving Regulatory Landscape in Coal Sector:
  5. High-level Analysis of the Bidding Guidelines & Parameters
    1. Eligibility Criteria
    2. Bidding Norms
    3. Guidelines for putting Technical and Financial bids
    4. Key check-points and considerations of the bidding process
    5. Illustrative case providing a high-level analysis of a competitive bid vs. uncompetitive bid
  6. Understanding the impact of Captive Coal Blocks on different industries, such as: Power, Steel and Cement
    1. Understanding the demand-supply constrains by different industry segments
    2. Understanding the role of domestic coal on the overall business of the different industry segments
    3. Understanding the extent of requirement of coal by different industry segments
  7. Understanding the price appetite of different industries for coal
    1. Understanding the downstream market dynamics of different coal consuming industries
    2. Understanding the level of cushion with the industries to pass-through the coal price variations
    3. Identifying the typical range of coal prices as per the appetite of coal consuming industries
  8. Mapping of Captive Coal Blocks put on bidding:
    1. Location of blocks, proximity to railway and road
    2. Broad outlook on the geological aspects of the mines put under bidding, including nature of land, forest cover, stripping ratio, number & thickness of seam, etc.
    3. Outlook on reserve size, actual production curve, etc
    4. High-level benchmarking of cost of mine, floor & reserve price
  9. Understanding the existing infrastructure for the blocks that are in production and that are in advanced stage of getting operational:
    1. Outlook on infrastructure in place for production of coal
    2. Outlook on the infrastructure for the mines that were producing
    3. Outlook on key players and companies that were engaged in the production and development of mines
  10. High level analysis of the current position of clearances & approvals for the Captive Coal Blocks put on offer
  11. Evaluation of Captive Coal Blocks suitable for different industries or end-use plant
  12. Understanding of the logistics & supply infrastructure such as railway and road connectivity to the coal blocks put on offer
    1. Mapping of existing railways and road infrastructure, connectivity, outlook on coastal trans-shipment of coal major end-use market
    2. Understanding of bottlenecks and gaps in infrastructure that may pose challenges in future
  13. Comparative Analysis of coal blocks put on bidding, with each of the blocks scored & ranked on critical weighted parameters to help bidders take Go-No Go decision
  14. Conclusion

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